Developing world could beat economic crisis: IMF

April 3rd, 2008 - 11:50 pm ICT by admin  

Washington, April 3 (DPA) Developing countries are well placed to weather the current economic crisis despite growth in the US coming to a virtual halt, according to a report by the International Monetary Fund (IMF) Thursday. The IMF also said industrial nations with more developed mortgage and financial markets have been struck harder by a correction in housing prices than poorer countries, where fewer people have access to credit.

Growth in the US has come to a “virtual standstill” and Europe will also experience a downturn as a result of financial market turmoil and a tightening of credit markets, said Simon Johnson, the IMF’s economic counsellor and director of the research department.

But poorer nations by contrast will see less of a spillover from the housing crisis into the wider economy, according to the analytical chapters of the IMF’s twice-annual World Economic Outlook.

Developing countries have a “strong basis for sustaining their growth” through a rise in manufacturing exports and a surge in commodity prices that has fuelled the integration of the world’s economies.

The IMF also said tackling climate change could have long-term economic benefits if addressed on an international level by way of a global carbon-pricing scheme.

Emerging economies including China, India and Brazil would also have to be part of any global treaty on curbing emissions. Developing countries will account for 70 percent of greenhouse gases emitted in the next 50 years and must immediately begin pricing carbon emissions into their future growth, the IMF said.

The IMF’s full World Economic Outlook report will be released during the IMF and World Bank spring meetings next week.

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